The senior management of luxury auction house Sothebys
is itself “living a life of luxury” and recently frittered away the
wealth of shareholders to the tune of “hundreds of thousands of dollars”
while scarfing down pricey wines and gourmet food during a New York
restaurant visit.

This is according to a sharply
written letter from hedge-fund manager Daniel S. Loeb to CEO William Ruprecht. Loeb calls for Ruprecht’s resignation after alleging “little
justification” for the CEO’s “generous” $6.3 million salary and “guaranteed perks” that set a poor example for employees.
In the age of Occupy Wall Street and hand-wringing about the alleged
excesses of CEO pay, the big picture getting lost is the role of people
like Loeb.
Sothebys is a publicly-traded corporation and Loeb
is an “activist investor” seeking a hostile takeover. His fund is now the biggest shareholder, at just over 9 percent, but to fire current
leadership he must persuade other shareholders the place is being mismanaged.
Ruprecht, Loeb and many if not all of Sothebys' customers are comfortably
within the top “one percent” of income earners. Yet the “hostile”
allegations in the letter - much like the rhetoric in other corporate
takeover battles - invites the reader to believe
executive compensation at Sothebys is both excessive and unfair. It’s as
if Loeb thinks his audience is the other “99 percent” of us - if not
OWS itself.
He is mostly correct to think so.
Today, more than half of Americans - in their 401k or mutual fund accounts - report
owning stocks in our largest corporations. That figure was as high as 65 percent in 2007.
The true number is even higher: Many Americans in public and private
workforces don’t realize their pension funds also have considerable
stock holdings. This is particularly true of union workers. Sothebys
is no exception: Its other largest shareholders are State Street Global Advisors, Vanguard Investments and many other firms that manage
the wealth of America’s middle class.
In other words: All of us. Vanguard holds most of my money, and they
don’t get to keep it unless they invest it wisely in companies that are
not wasting it. If Ruprecht is overpaid, people like me hold some of the
power to get him fired. Millions of us, put
together, have a big stake in it.

Earlier this year, the directors of CalPers, California’s massive state
employee pension fund, used the funds’ stake in JP Morgan to try
and push around CEO Jamie Dimon, perhaps the most powerful private banker on Earth.

And JP Morgan owns nearly 2 percent of Sothebys, so Ruprecht even answers to California state workers.
Politically, “activist investors” such as the Interfaith
Center on Corporate Responsibility also use member donations to buy up shares and push corporations toward their view of “social responsibility.”
Hostile takeovers often require only majority support of the ownership. But at the end of her tenure, Gov.
Jennifer Granholm signed a bill upping the requirement to two-thirds support for Michigan corporations. A Republican-supported bill with
overwhelming Democratic support, it was sold as protecting Michigan companies from “corporate raiders.”
It was crony capitalism: Politicians protecting CEOs from being fired by those of us who pay their salaries.
Karl Marx predicted workers seizing control of the means of production
would bring about the collapse of capitalism. He was half right: We now
all own a lot of the means of production, yet capitalism is stronger.
But Marx’s predicted demise of capitalism will come if we let
politicians and some CEOs continue to conspire against the people
they’re supposed to work for. Ken
Braun was a legislative aide for a Republican lawmaker in the Michigan
House and worked for the Mackinac Center for Public Policy. He has
assisted in a start-up
effort to encourage employers to provide economic education to
employees, and is currently the director of policy for InformationStation.org.
His employer is not responsible for what he says here ... or in Spartan Stadium on game days.